The reduction in import duty on platinum in India looks set to spark a boost in its popularity in the jewellery sector, according to industry observers.

Indian finance minister P Chidambaram unveiled the plans last week in his budget, with the duty falling from Rs. 550 per 10 grams to Rs. 200.

Now Vaishali Banerjee, manager, Platinum Guild India (PGI) Pvt, says the benefits will be felt in the domestic jewellery market.

"This will definitely help the market and the benefits will surely be passed on to the consumers by the reduction of price of platinum," he told the Chembur Metro.

"With the reduction on import duty, I am expecting a reduction in the price, which I feel, will help in increasing the demand for platinum."

A number of leading jewellers say they will now increase supplies of the precious metal to meet an expected increase in demand.

Laxman Kothari, owner of Mahalakshmi Jewellers said if the changes were passed on to the consumer a result of the changes, he would "surely increase the stock of platinum jewellery in my showroom".